CONFIDENTIAL
Article XXII (despite the non-GATT relationship), the negotiations were more likely to be conducted in a creative atmosphere if HMG could show that it had exercised a degree of imagination in the cotton problem. Despite the dangers of separatism, Hong Kong wanted to record their objection to discussing a comprehensive arrange- ment unless HMG could prove injury in every product/group in the current bilateral agreement.
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Summing up for the UK side, Mr Ridley said he was disappointed at Hong Kong's response. He had to warn Hong Kong that once the multi-fibre concept became more widely publicised, the base year for performance criteria in any future agreement was unlikely to be later than 1971 despite the possibility that Hong Kong's exporters would have much higher benchmarks. Furthermore once we joined the Community our freedom to negotiate a bilateral arrangement of this type with Hong Kong would be removed. In the meantime we would examine in more detail the two proposals put forward by Hong Kong for modernising the present cotton arrangement.
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The meeting was adjourned at 5.30 pm.
CONFIDENTIAL
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